New Japan Government to Bust Budget Caps

By

Eleanor Warnock And

Takashi Nakamichi

Dec. 19, 2012 8:07 a.m. ET

TOKYO—Japan's incoming government, focusing on hefty spending to goose a sluggish economy, will break through the ousted administration's debt caps, a senior government official said Wednesday—something that would spell bad news for long-term government bonds on the view that fiscal discipline is eroding.

Japan has the world's worst debt burden at well over twice the size of the economy. But government bond prices have remained...